The Environmental Protection Agency, reversing itself for the second time in a matter of weeks, has decided not to transfer responsibility for asbestos regulation to two other federal agencies, at least not until the legal implications of the move have been examined.

In a memo dated Friday, Acting Deputy Administrator A. James Barnes ordered the EPA's staff to halt work on the controversial referral proposal, citing "a number of legal and policy issues" that need to be addressed.

The action essentially puts the EPA back at square one on regulating asbestos, a fibrous mineral that has been linked to lung cancer and other human ailments.

Last summer, the EPA wrote and sent to the Office of Management and Budget a set of regulations designed to reduce asbestos exposure. The rules would have banned immediately or sharply restricted some consumer products, such as asbestos-impregnated vinyl tiles, and would have phased out all uses of the substance over a period of 10 years.

But last month, after trying unsuccessfully for more than six months to get the regulations approved by the OMB, the agency announced that it intended to withdraw the proposed rules and leave asbestos regulation to the Occupational Safety and Health Administration and the Consumer Product Safety Commission.

The announcement drew sharp criticism from organized labor and public-health activists, who contend that neither OSHA nor the CPSC has as much power to control asbestos as the EPA has under the Toxic Substances Control Act. EPA officials had made the same argument last summer when they sent their proposed rules to the OMB.

The decision to hand off asbestos also prompted an angry internal letter signed by more than 100 EPA employes, and attracted the attention of Rep. John D. Dingell (D-Mich.), chairman of the Energy and Commerce subcommittee on oversight and investigations.

In a Feb. 25 letter to EPA Administrator Lee M. Thomas, Dingell called the referral decision "highly questionable" and asked that it be suspended until his panel had reviewed the matter.

EPA officials delivered several boxes of documents to Dingell's subcommittee on Friday, the same day that Barnes ordered EPA employes to stop working on the referral.

Barnes said yesterday that the agency decided to bow out of asbestos regulation because "we didn't think we had a choice." After OMB officials questioned the legality of the EPA's proposed regulations, Barnes said, EPA lawyers decided that the legislative history of the toxic substances law dictated that other agencies had to be given a chance to act first.

"We may well have reached that decision too quickly," Barnes said. "Asbestos is too critical a substance, in terms of its widespread presence in the environment and its known health effects, for us not to be sure of where we're going."

OSHA twice has toughened the permissible work-place standard for asbestos, and has been considering a still more stringent standard. EPA officials have argued that even the more stringent standard would leave asbestos workers facing unacceptably high cancer risks.

CPSC has no authority to protect workers, who face the highest risks from asbestos, although it has pressed successfully for the voluntary removal of some consumer products containing asbestos, such as hair dryers, from the marketplace.

Barnes said that the EPA's new legal review, which also applies to a referral involving an industrial chemical called MDA, may be completed as early as next week.

"Ultimately, the end result will be either that we go to OSHA or that we do it ourselves," he said, "but either way, there will be more analysis."